is there a good way to deal with these?
CakeCrusader
Posts: 1,118 Forumite
in Credit cards
I'm not trying to accumulate credit cards, just get a low APR with a limit of about 1k for emergencies, but I've found myself with 6 cards and I don't really want (or need) them all, so I'm not really sure what's best to do. The ones with the high interests all have high APRs. I don't know whether to close some of them in the hope they drop the APR. None have defaulted, I never go over my limit, I never pay the minimum balance (I usually pay about 1/4 of it though).
Vanquis - £3k limit, balance £0 Interest is 59.9% (I've had this the longest)
Aqua - £1.6k limit, balance £0 Interest is 49.5%
Tesco (BT) - £1.7k limit, balance £0 Interest is 19.9% from Nov 2018
Tesco - £750 limit, balance £450, Interest is 0 until Feb 2019 then it's 19.9%
Barclaycard Initial - £650 limit, balance £0, interest 35.9%
HSBC - limit £6.5k, balance £2.2k, interest 0% for 32 months (0% on spends for 3 months then it's 19.9%) < I might need to keep hold of this one for a couple of years.
Many thanks!
Vanquis - £3k limit, balance £0 Interest is 59.9% (I've had this the longest)
Aqua - £1.6k limit, balance £0 Interest is 49.5%
Tesco (BT) - £1.7k limit, balance £0 Interest is 19.9% from Nov 2018
Tesco - £750 limit, balance £450, Interest is 0 until Feb 2019 then it's 19.9%
Barclaycard Initial - £650 limit, balance £0, interest 35.9%
HSBC - limit £6.5k, balance £2.2k, interest 0% for 32 months (0% on spends for 3 months then it's 19.9%) < I might need to keep hold of this one for a couple of years.
Many thanks!
0
Comments
-
As long as you pay in full the APR doesnt mean a thing.
Having the cards open helps with your overal % of credit being used against total £ of available credit. The lower this % the better. So by closing cards, it will increase this %.
Another thing to remember is that credit histories like longevity of accounts. Although after you close an account, the history generally stays on your report for six years, after this date it will drop off.
Personally.... I would put them all in a drawer and set up full statement payment for each of them apart from the ones with balances. Then rotate them each month and use them for a purchase or two. The full payment you have set up will take care of the statement balance and you then rotate to another card the next month. This will continue to provide a positive history.
I would focus on getting that £450 balance gone by Feb 2019 so you will need to pay £90 per month (including Oct) to clear this ammount. Then once this is done, would out your outstanding balance on your HSBC and divide that by the remaininng interest free months to get your monthly figure to pay off before the end of the 0% promotional period.
If you feel that there may be temptation with using the cards then just cut them up but if you are disciplined the above method works well.
If you really want to close a card then maybe the Barclaycard Initial as I dont think they generall progress until having the card for several years (in terms of credit limit and reduction of APR) but really the choice is yours what/if to close.
Good luck!0 -
Thank you!
The last Tesco one will be cleared by mid November, I'm just waiting to get paid. Setting up a direct debit for the full amount but rotating them is a good idea, thank you. The Barclaycard's convenient as it's connected to my bank account and I transfer cash to it via the app. I'll clear the HSBC card within 6 months.0 -
How long have you had each of the cards for?0
-
-
Since you want a low APR, Tesco do a low APR credit card and they have already given you 2 cards so i would close the empty Tesco one, wait 1 month then apply for their Low APR credit card. Then start closing the rest once empty if accepted by Tesco.
One advantage of making Tesco your main card is they offer the transfer money to bank account feature so is a good card to have if you need actual cash not all credit cards do this.0 -
It depends how much you want to keep credit limit. As you say you want to pay in full, then it also depends upon your finance (your saving and future income etc)
If you are comfortable with £3000 limit with multiple smaller limits cards.
Use them your daily purchase
Tesco (BT) - £1.7k
Tesco - £750 limit
Barclaycard Initial 650
HSBC: don't use it, repayment only: Instead of paying off within 6 months, keep 2.5% min payment up to 32 months, then pay in full. (You just create "HSBC repayment fund" in the saving account, I think you can get interest between 20 - 40 pound. (Yes, stoozing!) Sorry, I was redirected from stoozing thread to here, so I just want mention about it.
http://www.whatsthecost.com/stoozing.aspx
But if you just want to get rid of your debt as soon as possible, which is GREAT. Then ignore this advice. You can start saving after getting rid of your debt first. Then you can use HSBC with £ 6500 limit, you will be flexible as long as you always pay in full with direct debit. (In that case you may want to dump Tesco £750 limit card as well)
Dump the below
Vanquis - £3k limit 59.9%
Aqua - £1.6k limit,49.5%,
You will get 3K - 10K credit limits with all other cards. I suppose you have enough credit limits. Do you need these extra 4.5K limits with insane interest rate? You really don't need so called "Credit building cards" ( or “Debt trapping high interest cards”) anymore, Yes it is completely true if you always pay in full, APR doesn’t mean anything. But when you have got a new HSBC 6500 limit card, why you need to keep these cards?
I don't see any merit to keep them; even you would be targeted wrongly as a poor credit rating card holder. (This happened to my friend, since he has got a Aqua card, he has been targeted by many payday loan companies..) Also some kind of technical payment problems would happen, even you paid in full in time you might be forced to pay 50% interest even temporally. I don't see any point to keep insane high interest cards now.0 -
Lenders don’t see whom your credit cards are from, or any other types of finance on your credit files for that matter.
So being targeted because you have a “credit building card” is BS - they must have consented to some marketing info to be sold on.
Keep them all open for now as they add account open longevity to your files and also help lower your credit used percentage.
Use them all intermittently for normal spends and pay off in full after each statement.
See how they stand in a year or 6 months time in terms of limits etc.0 -
It depends how much you want to keep credit limit. As you say you want to pay in full, then it also depends upon your finance (your saving and future income etc)
If you are comfortable with £3000 limit with multiple smaller limits cards.
Use them your daily purchase
Tesco (BT) - £1.7k
Tesco - £750 limit
Barclaycard Initial 650
HSBC: don't use it, repayment only: Instead of paying off within 6 months, keep 2.5% min payment up to 32 months, then pay in full. (You just create "HSBC repayment fund" in the saving account, I think you can get interest between 20 - 40 pound. (Yes, stoozing!) Sorry, I was redirected from stoozing thread to here, so I just want mention about it.
http://www.whatsthecost.com/stoozing.aspx
But if you just want to get rid of your debt as soon as possible, which is GREAT. Then ignore this advice. You can start saving after getting rid of your debt first. Then you can use HSBC with £ 6500 limit, you will be flexible as long as you always pay in full with direct debit. (In that case you may want to dump Tesco £750 limit card as well)
Dump the below
Vanquis - £3k limit 59.9%
Aqua - £1.6k limit,49.5%,
You will get 3K - 10K credit limits with all other cards. I suppose you have enough credit limits. Do you need these extra 4.5K limits with insane interest rate? You really don't need so called "Credit building cards" ( or “Debt trapping high interest cards”) anymore, Yes it is completely true if you always pay in full, APR doesn’t mean anything. But when you have got a new HSBC 6500 limit card, why you need to keep these cards?
I don't see any merit to keep them; even you would be targeted wrongly as a poor credit rating card holder. (This happened to my friend, since he has got a Aqua card, he has been targeted by many payday loan companies..) Also some kind of technical payment problems would happen, even you paid in full in time you might be forced to pay 50% interest even temporally. I don't see any point to keep insane high interest cards now.
I posted this in the stoozing section and they moved it.
My current income's slightly above 'average' and doing a balance transfer has helped, I'm also have other income which is paid every 6 months so the whole of the remaining balance won't take too long to clear. Would it be a stupid plan to run up a small balance on one of the cards, say 1k, and then transfer this to the HSBC card? I have 3 months to transfer everything over while I have the 0%BT. I'm just aware that if I use the HSBC card for spends I'll get charged interest after 3 months (which is fine as I'm due another batch of income in a couple of weeks), whereas if I transfer within 3 months it will be interest free and I can pop the income into something with an interest rate for a while. It seems like a logical way to earn some interest?0 -
Lenders don’t see whom your credit cards are from, or any other types of finance on your credit files for that matter.
So being targeted because you have a “credit building card” is BS - they must have consented to some marketing info to be sold on.
Keep them all open for now as they add account open longevity to your files and also help lower your credit used percentage.
Use them all intermittently for normal spends and pay off in full after each statement.
See how they stand in a year or 6 months time in terms of limits etc.
This probably has something to do with the credit reference sites. I look at credit card matches, then I have a soft search from a credit card company on my file a month later. I look at the loan matches, and I get a loan company doing a soft search a month later. Trick is probably not to check your credit file too often.
I think that's a good plan, thank you! I'm thinking there's got to be a way that I can make the most out of having these, I want to make them work for me. 0 -
CakeCrusader wrote: »I posted this in the stoozing section and they moved it.
My current income's slightly above 'average' and doing a balance transfer has helped, I'm also have other income which is paid every 6 months so the whole of the remaining balance won't take too long to clear. Would it be a stupid plan to run up a small balance on one of the cards, say 1k, and then transfer this to the HSBC card? I have 3 months to transfer everything over while I have the 0%BT. I'm just aware that if I use the HSBC card for spends I'll get charged interest after 3 months (which is fine as I'm due another batch of income in a couple of weeks), whereas if I transfer within 3 months it will be interest free and I can pop the income into something with an interest rate for a while. It seems like a logical way to earn some interest?
Debt Repayment idea only:
If you want to take an advantage of HSBC card, you may consider the following options. (I assume that you are not going to have any other debts during repayment period!)
0) Setup Direct Debit minimum payment for HSBC (All other credit cards payment should be paid in full via Direct Debt)
1) Option: Balance transfer £450 from Tesco credit card within 60 days, (with a small handle charge of 1.4% but 25 pound cashback in total)
2) Option: Use HSBC card for strictly your daily purchase only within 3 months. (I would use only for 2.5 months to avoid any mistake) up to £550 ?
3) Then stop using this card after 3 months!! (Use other credit cards with full payment via direct debit. Even you can freeze this credit card for further use via HSBC online banking.
Monthly Repayment
http://www.whatsthecost.com/stoozing.aspx
£2200 debt repayment (without options)
[STRIKE]Initial month £44.00 then -£1 each following months (43, 42, 41)[/STRIKE]
Initial month £55.00 then -£1.3 app each following months (53.62, 52.28, 50.98 ... 25.73) and paid all £1003.34 for 32th month payment
£3200 debt repayment (with options)
[STRIKE]Initial month £64.00 then - £1.3 app each following month (62.7, 61.4, 60.2 ...)[/STRIKE]
Initial month £80.00 then - £2.0 app each following month(78.00, 76.05, 74.15 ... 37.43) paid all £1459.81 for 32th month payment
As you have some irregular incomes, this arrangement will help overall your cash flow. Then as you said, if you would deposit your free repayment funds to a saving account, you can earn some interest as well. Technically you borrow money with 0% interest from the credit card company, and put them into the saving account to earn the interest. (stoozing)
You can repay your debt much earlier without earning interest first, if you like to. If you do use HSBC interest free card carefully, you should be able to clear your debt without paying any further interest.
Hope it helps. 0
This discussion has been closed.
Categories
- All Categories
- 343K Banking & Borrowing
- 250.1K Reduce Debt & Boost Income
- 449.6K Spending & Discounts
- 235.1K Work, Benefits & Business
- 607.8K Mortgages, Homes & Bills
- 173K Life & Family
- 247.8K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards